“cord-cutting” (no longer subscribing to cable OR satellite TV) is an ever-growing trend among American consumers. It’s a fact and “content-providers” like ESPN, HBO, Showtime etc are not sure what to do about it. On-line content providers (Netflix et al) appear to be the wave of the future…. and everyone likes to “catch the wave”.
Consumers want a la carte options rather than paying for dozens of irrelevant channels they never watch. Thats not good for the “irrelevant channels”.
Our favorite “Millennial” a/k/a “Kid” hasn’t had “cable” in any form for several years…. uses on-line providers for what she wants to watch which is only a handful of programs.
News flash: Cord cutting is a problem
Poll: Over the past year, 8 percent of respondents cut pay TV
June 24, 2015
Digitalsmiths, a TiVo-owned platform that suggests video options across a range of devices, found that 8.2 percent of respondents had gotten rid of their cable or satellite service over the past year.
In first quarter alone, 18 percent said they had either ended services or decreased the number of channels they receive. The main impetus for cutting the cord is to save money, though some respondents also said they were unhappy with the customer service offered by their pay TV providers or they wanted channels or packages that were unavailable. Clearly this could become a bigger problem as more cable networks make their services available through over-the-top services, which allow people to stream channels through the web rather than getting them through a cable provider as part of a bigger package.
HBO and Showtime have already launched OTT services. Billy Purser, vice president of marketing at Digitalsmiths, talks to Media Life about whether cord cutters are a big problem, what’s behind their decisions, and how cable and satellite companies are combating cord cutting.
How big of a problem is cord cutting?
In the last 12 months, 8.2 percent of respondents cut cable/satellite service.
Additionally, in the next six months, 4.8 percent stated they are planning to cut cable/satellite service, and 3.1 percent plan to switch to an online app or rental service instead of pay-TV.
What is driving cord cutting? Is it all just about saving money on bills?
The high cost of service is the top reason for unsatisfied respondents, but there are other factors as well, including poor customer service and bad channel selection.
How are pay TV providers fighting cord cutting?
MVPDs [multichannel video programming distributors] are spending a lot of resources on improving the overall experience with their services through new TV Everywhere offerings on more and more devices, and innovating their current offerings with enticing features such as personalized recommendations.
These improvements will help consumers find content easier, both inside and outside of the home.
These enhancements could lead to an increase in perceived value of consumers’ pay TV service, and thus less likely to churn.
Also, pay TV providers have launched new services, such as DISH Network’s Sling TV which offers a “skinny package” option to consumers, and Verizon recently announced a similar offering.
How is this impacting the pay TV market?
You are beginning to see a different industry landscape. As more and more pay TV options become available, the consumer wins.
Is offering a la carte channels a way to entice people to stay with cable?
While a la carte is not really offered by pay TV providers today, the report clearly shows consumers would rather have the ability to select their channels.
There will always be a group of subscribers that want the large bundles because they watch a variety of channels and content; however, a la carte could be a way to appeal to both audiences.
Do you think this will change?
We expect more pay-TV providers to test the waters of “skinny packages.”
How much do you expect cord cutting or cord cheating to grow by this time next year?
We leverage the data and watch for trends, but we are not in a position to begin to predict the market.